Our economy has been working in an inherently linear way for the past several decades. However, the buy-use-discard-repeat consumption mentality is slowly changing amongst consumers. Likewise, an increasing number of executives are starting to see the benefits of the circular economy in their own industries:
“We are now building a circular economy – a new economic model in which, for example, consumption is based on using services – sharing, renting and recycling – instead of owning things”, says Mari Pantsar, Director of Carbon-Neutral Economy at Sitra.
It’s been estimated that switching to a circular economy model from the current linear style could bring net savings of €600bn to European companies, with market potential calculated to be over 3 billion euros annually in Finland alone. Every single corporation, company and startup should want a slice of it.
Circular economy and its related knowledge contain enormous potential for economic growth. It opens new pathways for both vertical and horizontal cooperation. To make the switch to circular economy, the market needs new products and services.
While large corporations have the financial and technological capital to be the forerunners in circular solutions, they often encounter challenges in bringing new innovations to the market. This is where corporate venturing comes into play. Corporate-startup collaboration has been seen to have a positive impact on company performance and also the capability to work on open innovation projects. Corporations can build systems and structures to find, match and cultivate the right startups that quickly bring new solutions to the market. From the startup’s point of view, the upside comes as increased visibility and improved reputation, accelerated business development and access to new markets.
Switching to circular economy means finding completely different ways of production, consumption and destruction. That is why cooperation between different market players at different levels of the production and distribution process is crucial.
We need to start seeing opportunities where others see problems.